Congressmen call for federal audit of Md. health exchange

John Fritze and Erin Cox, The Baltimore Sun

Two Republican lawmakers called Wednesday for an investigation into federal money spent on Maryland's troubled health insurance exchange, raising questionsthat could shed light onwhether the Obama administration foresaw problems with the site before its launch.

Though the letter is focused on decisions made by state officials, an audit — if one materializes — would also delve into decisions made by the federal health agency. Health and Human Services officials have declined to say whether they knew of the Maryland site's problems early on.

The state's health exchange crashed Oct. 1, the day it launched. State officials attributed the problem to technical glitches, but email and other documents obtained by The Baltimore Sun showed that the development of the exchange had been troubled for months by major technical issues and warring contractors.

Maryland officials revealed Monday that the state's poorly performing exchange will cost taxpayers $33 million more than expected this year, bringing the total annual expense to $138 million. The money is needed, in part, to pay the company hired to help fix the dysfunctional website and to triple the workforce at the state's call center, which has been overwhelmed by requests for help from customers struggling to buy insurance online.

Overall, the state expects to spend $261 million on the exchange by the end of 2015 — more than 80 percent of it federal money. The congressmen's letter asks the inspector general to investigate whether the Obama administration should try to recoup any of that money.

"Despite all these warning signs, Maryland chose to continue to waste and abuse federal taxpayer money by opening up what they knew was a flawed exchange to the public," the lawmakers wrote.

Kingston chairs the health appropriations subcommittee charged with oversight of Health and Human Services. Harris, a Baltimore County lawmaker and Maryland's only Republican in Congress, serves on that committee.

Both have been ardent critics of the federal Affordable Care Act that led to the creation of the exchanges.

Donald White, a spokesman for the inspector general's office, confirmed that the agency had received the letter and said that, like all requests, the office would review it "very carefully and ... eventually respond to it."

Amid the political fallout from the state's glitch-prone exchange, little attention has been paid to the federal government, which received regular updates and at one point signed off on the state's progress after a successful demonstration.

The Department of Health and Human Services did not respond to a request for comment Wednesday. In the past, the department has declined to answer questions about whether it knew of problems with the site and whether it intends to try to recover any federal money.

Last month the department responded to questions from The Baltimore Sun with a statement saying that officials "worked closely with Maryland and other state-based marketplaces to provide the guidance and assistance they need to be successful."

A department spokeswoman did not reply to follow-up questions. A White House spokesman referred questions to the department.

In their letter, Harris and Kingston noted audits performed by BerryDunn, an accounting and consulting firm, that identified dozens of shortcomings in the exchange's development.

"BerryDunn warned leaders in Maryland that the exchange was in trouble and yet it appears no one took heed," they wrote.

The letter came as other political opponents of Gov. Martin O'Malley and Lt. Gov. Anthony G. Brown, both Democrats, have tightened their focus on the millions of dollars spent on the Maryland exchange. Brown, the state's point man on health care reform, is a leading candidate for governor this year.

A Republican state lawmaker running against Brown recently called for an investigation into how the Maryland Health Benefit Exchange awarded millions of dollars in contracts. Del. Ron George of Anne Arundel County said political contributions from one of the site's largest contractors provided reason enough to review how officials hired the companies.

George's request echoes others made by state Republicans seeking an inquiry into how the project was managed. On Wednesday, Maryland Attorney General Douglas F. Gansler, one of Brown's opponents for the Democratic nomination for governor, called on Brown to give a full accounting of the money spent on the exchange as well as an estimated cost to fix it.

"It's disappointing but not surprising to see Doug Gansler working from the same talking points as Republican Congressman Andy Harris attacking Obamacare," Schall said in a statement.

"We are laser focused on trying to provide quality, affordable health care to as many Marylanders as possible," said O'Malley spokeswoman Nina Smith. "That has been our focus from the beginning. That continues to be our focus now."

State health secretary Dr. Joshua M. Sharfstein told a panel of lawmakers in Annapolis on Monday that the site still has "serious IT defects" that have lingered since the exchange was launched in October. The O'Malley administration plans to use existing contractors on the site at least through the end of March and then to reassess options.

Two contractors tasked with building the exchange are engaged in a court battle, its executive director has resigned, and enrollment in subsidized private plans has lagged behind projections. The state expected 150,000 people to enroll in private plans by the end of March, when people face a tax penalty for not having health insurance. So far, 29,059 have signed up in Maryland.